The bid, which would make it the largest-ever foreign buyout of a Japanese company, was confirmed by Seven & i, the owner of 7-Eleven, following media reports on Monday.

The news of the proposed acquisition caused a significant surge in Seven & i's shares, with a nearly 23% increase in Tokyo. This surge valued the retailer at approximately $38 billion. In contrast, Couche-Tard, Canada's largest retailer operating Circle-K convenience stores, is valued at around $58 billion. According to Seven & i, Couche-Tard's proposal includes purchasing all outstanding shares of the company, although the specific value of the offer remains undisclosed.

The bid highlights the growing investor interest in Japanese assets, which has contributed to the recent record highs of Japan's stock market. Seven & i, with approximately 77,000 employees globally, primarily generates its sales from its overseas convenience store business. To thoroughly review the proposal, the retail giant has established a special committee dedicated to assessing the potential acquisition. However, no decisions have been made by either the committee or Seven & i's board of directors at this stage.

The announcement of the bid came after the Nikkei newspaper reported on the matter. Alimentation Couche-Tard has not yet responded to requests for comments outside of regular working hours. Insider sources suggest that the talks between the two parties are still at an early stage. If the deal is successfully negotiated, it will follow Couche-Tard's previous acquisitions, including the $3.3 billion purchase of select TotalEnergies' European gas stations and a rejected $20 billion bid for Carrefour, Europe's largest food retailer, due to concerns about food security raised by the French government in 2021.

Notably, in 2020, Seven & i and Couche-Tard were competitors in their bid to acquire the American gas station chain Speedway, which Seven & i ultimately acquired for $21 billion. If the Alimentation Couche-Tard's bid for Seven & i's parent company is successful, it will be the largest-ever buyout of a Japanese company by an overseas entity, surpassing the $18 billion deal in 2018 for Toshiba's memory chip business by a consortium led by private equity firm Bain.

Seven & i has been focusing on reinforcing its flagship convenience store chain globally as part of a broader restructuring strategy. This strategy has involved divesting lower-performing assets in response to pressure from shareholder ValueAct Capital's concerns about asset allocation.

Despite the significant bid, analysts remain skeptical about the likelihood of the deal being finalized. Oshadhi Kumarasiri, a LightStream Research analyst covering Seven & i, doubts that the takeover proposal will come to fruition due to Seven & i's resistance to divest from its legacy businesses. Kumarasiri believes that a substantial premium over Seven & i's recent highs would be necessary for the management to consider the idea of the merger.

As discussions between the companies progress, the fate of the potential acquisition remains uncertain. Observers are eagerly awaiting further developments to see if the bid will ultimately lead to a transformational international deal for both Alimentation Couche-Tard and Seven & i.